Monday, July 10, 2006

Are we there yet?

Okay, so I can't resist having my two-bit say about Pankaj Mishra's Op-Ed piece in the NY Times

For the record, there's a lot that Mishra says that I agree with. My biggest problem with the piece is Mishra's inability to articulate, to others or to himself, just what it is he's opposing. Implicit in Mishra's arguments, there are, I think, at least 4 different claims that have been made about India:

1. The liberalisation and globalisation reforms of the early 90's have been beneficial for India - leading to a spurt in growth and improved standards of living for at least some sections of the population.

2. India is fast emerging as an important global player economically - both as an important market for MNCs as well as a pool for talent and services.

3. India is well on its way to becoming the world's dominant economic superpower

4. India's development has been broad-based and this century will see the majority of Indians enjoying lifestyles comparable to those in the West.

These are, in my mind, four very different claims - the links between which are tenuous at best. I personally happen to believe, for instance, that the first two are true, but that the last two are not.

What amused me the most about Mishra's article is that he starts of by taking exception to the claim that India is a capitalist success story and argues against this by showing that the vast majority of people are still poor. Huh? Since when has capitalism been about prosperity for the masses? Everything that Mishra says in his story actually suggest to me that India is the quintessential capitalist success story - where the elite bourgeois amass large amounts of wealth while the common people continue to live in deplorable conditions.

At any rate. Here are the things that Mishra is saying (or at least, I think he's saying, or trying to say) that I agree with:

1) The belief that large majorities of Indians will someday enjoy standards of living comparable to those enjoyed by people in the West is highly questionable, if not entirely untenable. Just given the sheer size of the population involved, the levels of growth and resources required to make that come true simply don't exist.

2) The benefits of India's growth in the last decade and a half have gone disproportionately to a small minority of Indians. Therefore, claims in the popular media about India's development (e.g. India Shining) are premature and excessively optimistic. Unless serious thought is given to the very real issues facing India - both in terms of infrastructure and in terms of equity - these inequalities will perpetuate, and absent institutional efforts to enhance social welfare, they are unlikely to be 'naturally' overcome.

3) In the absence of equitable growth, income disparities between the rich and the poor will become more glaring and social unrest will increase over time. Worse, given India's democratic context, the lack of equitable distribution of benefits will make it difficult to create strong political support for further reforms. Until the common people see a tangible pay-off from the liberalisation to themselves, they will continue to vote based on issues other than economic performance, and if the masses don't care about it then the government won't either.

4) Given all that, there's good reason to be more cautious about India's potential. India is far from well-set on the path to being an important global superpower. It's too early to be celebrating India's rise to global dominance.

Notice that none of the above implies any of the following:

1) That India would somehow have been better off by sticking to its pre-reform regime. There is no case, in any of this, for turning back reforms. The reforms have led to real growth - that the growth has been uneven is, at best, cause to reflect more closely on the welfare implications of some of the changes made. The fact that some people are getting richer while the majority remains poor doesn't mean that development won't eventually spread - if anything, high incomes and therefore high savings may well be critical to the accumulation of capital needed for rapid growth. We certainly need to think about how the disparities created by that shall be managed, and how the growth achieved will eventually be funneled into real development, but that's no reason to dismiss the growth that has been achieved. That at least some sections of population are enjoying dramatically greater prosperity is an achievement, and cause enough for some celebration, however guarded.

2) That India can only play an important role in the global economy if it achieves broad-based development. Or that India becoming a key global player will necessary mean prosperity for all its people. This would be nice, of course, but it's not, in my view, strictly necessary. I think Mishra is ignoring the sheer size of India, and exaggerating the unsustainability of unequal growth. It's not hard to imagine an India where 5% of the population has extremely prosperous life-style while the remaining 95% remains little better off than they were originally. Yet that 5% alone could make India a key player in the global marketplace.

Understand that I'm not saying that such a scenario is desirable. Only that there's no basis for Mishra's assertion that India's emergence as a key global player is contradicted by its poor performance on human development indicators. India is large enough to be a key global player even without development for all.

3) Echoing point 1 above, there's no reason to believe that creating more broad-based development will require state intervention of the kind associated with the pre-1991 days. That government policy has a key role to play in ensuring the sustainability of India's development is unequivocal, and that government spending is required to make development more equitable is certainly true. But none of that implies a return to a system where the government hijacks the role of the market and sets up inefficient and bureacratic monopolies to 'serve' the people. There is no reason why the government can't intervene through the market to aid in the redistribution of wealth. And there's a vast difference between the kind of clean, deregulated policy we need to let the market operate and the kind of policy that tries to replace and manage the market, which is what we've traditionally had.

Of course, Mishra isn't necessarily saying that we should return to the old days or that the reforms are bad either. But it's a pity that he doesn't really articulate what he thinks the right answer is, leaving the door open for people to assume that a return to the pre-reform days is what he's advocating.

Overall then, Mishra makes, I think, a convincing case for why India isn't a superpower yet and why it's yet to be proven that it ever will be. And in doing so, raises important and relevant questions about the distribution of growth and the challenges of growing inequity. What he doesn't give us is any reason to believe that the changes over the last 15 years are in any way inimical to India's chances of becoming an important global player. Saying we still have a long way to go isn't the same thing as saying we haven't made any progress. Just because something is overhyped doesn't mean there isn't some truth to it.

P.S. Mishra also says some exceedingly silly things about communist parties being voted to power, US nuclear policy towards India being driven by rich Indian-Americans and India not being able to serve as a counterweight to Iran and China because it trades with them. I'm just going to ignore all that, as not being worth comment. Notice though that if India can't be a counterweight against Iran and China because it gets oil from the former and trades with the latter, then one wonders how the US can possibly be opposed to Iran and China to begin with.

23 comments:

confused said...

Falstaff,

You are giving more respect to Mishra than he deserves. His agenda is more insidious.

Of course he cannot make the argument that economic reforms or the limited patchy ones we had in India have benefited no one. Because that is so obviously plain wrong. So he goes around in cirles by pointing out at the inequitable growth and then makes the subtle case that economic reforms have not worked. The key question is why is the growth inequitable? The answer in my opinion is because we not really reformed some of our key sectors for example agriculture. When 60% of India's population is engaged in a sector which is untouched by reforms then how can we judge the efficasy of of the reforms by that yardstick? Or take manufacturing for that matter. India's success in software is less due to reforms and more due to enterprise, luck and being at the right place at the right time. However, manufacturing requires infrastructure in which we are sorely lacking . So is that the fault of economic reforms? For me, Mishra's arguments would have made sense only if he had demanded that sectors hithero left untouched by reforms are included in future economic agenda. Nowhere, he makes the case.

Also, the commentators who rave about India being the next economic superpower are talking about the future, at least 20 years down the line. No one is claiming that India has arrived as of NOW. Mishra seems to be pretending that except he, no one else can see the extent of India's poverty and her problems and he has to come running to show the picture. Also, notice how subtely he puts forward the Maoist agenda completely forgetting that Maoist insurgency has existed India since almost 1960's, the Naxalbari movement. Of course, his talking about Kashmiri terrorism and Naxalites in the same breadth is a jump in reasoning only Mishra is capable of.

My problem with Mishra is not that he shows the seedy underside of India, more power to people who show us that. My problem is that he offers no solution and keeps making the case(without ever clearly saying so) how reforms have been ineffective in remving poverty. Though even that claim is is tenous and reforms have lifted millions out of poverty.

confused said...

Falstaff,

In the Mittal piece, you have made the argument that ''India's growth is impossibly narrow-based''(comment section). Is that not too strong a statement to make? I don't think India is an example of crony capitalism nor it's growth been so narrow-based. We are talking of a middle class of 200 million year, what was the size of the middle class before reforms?

Tabula Rasa said...

as kids it was drilled into us that reading newspapers and magazines is one of the most important things that one needs to be doing. yet it's amazing how little value is actually delivered newspapers. (and this is the "best" newspaper in the world that we're talking about.) no matter where one looks, the front pages are stocked with carefully slanted with a selected cross-section of events, and the inside pages are nothing but hot air.

then again, this particular piece was after all in the opinions, column, and opinions are like arseholes, after all, everyone has one.

Falstaff said...

confused: I agree with you on the last bit - it would be nice if Mishra would tell us just what it is he wants to see done. just saying that India's hopes of becoming an economic superpower is a pipe dream isn't good enough.

That said, I'd have to agree with Mishra that nothing in the current scenario suggests to me that India is likely to be an economic superpower 20 years from now.I don't think it's just that agriculture hasn't been reformed. I think the bigger challenge is that getting to real superpower status will require massive investments in physical and human infrastructure that we've seen sparingly so far and a much faster pace of policy change. And neither of those things is going to happen unless there's political will behind them, which there's unlikely to be if the majority of the population sees no benefit from the reforms.

So I think Mishra is right in being pessimistic about the odds of India becoming a superpower anytime in the next half century - though I agree it would be nice if he would contribute something more than mere pessimism. And certainly he's hardly the first or only person to see this. It's strange how he chooses to take on as an opponent the popular press - hardly the most enlightened opponent one could choose.

Oh, and certainly a number of his other arguments, such as the one about Marxism are fairly bogus. But as I said in my comment on the Mittal thing, the man has a book to sell. He HAS to be provocative.

Perhaps saying that it's impossibly narrow based is a bit of an overstatement. But it's hard to claim that a country has truly developed when 80% or more of its population has yet to benefit from reforms. I'm not for a moment suggesting that the reforms are a bad thing - simply that we're not out of the woods yet and there's a lot more we need to do before we can claim to have truly achieved development.

TR: Yes, I know - that's such a myth. Was it Thoreau who said that he never learnt anything worth knowing from a newspaper?

To be fair, it's true that the NYT isn't always this bad. I think the governing principle is to be wary of people who're invited to write Op-Ed pieces just when they've published a book.

seven_times_six said...

What confused said. His mischief is clear, and it is appalling that people want him to "offer solutions" for "the important and relevant questions he raises".

The "interesting" questions he's raising are but obvious: yes, there is still a lot of poverty in India. But why exactly do we want an author with communist sympathies: the very root of the problem that is causing the poverty: to suggest solutions?


His "raising" of such an obvious zero information bit question has the sole purpose of casting doubt on even the pitiful amount of reforms that have taken place; look at the increasing set of deplorable reform-policy scalebacks from the UPA administration.

It is no coincidence that it is those with communist sympathies who raise ostensibly eye-opening "questions" about Indian poverty that apparently all of us poor stupid Indians were blind to:

OF COURSE they would cast doubt and throw cold water on the effects of REVERSING their socialist-communist policies.

I'm appalled at people's naivette, I'm appalled by how much leeway we're giving to the communist killers and poverty perpetuators, I'm appalled by this post.

confused said...

Falstaff,

And you really think Mishra's agenda is confined to debunking the India rising arguments? I would have no problems with that approach. First, there is no fixed criterion for economic stardom. Second, if large parts of India remain poor, then such stardom has little meaning for me. In that limited aspect, I agree with Mishra. My point is that by citing only the inequities, Mishra is undermining the reformist agenda. When has he ever made the call to expand reforms to include the disadvantaged? He does not, because neo-socialists having been throughly discredited by 40 years of Nehruvian socialism have given up that approach. Instead they attack the reforms by citing how it has not touched the life of everyone and therby implicitly advocate a roll back.

Second, how do we extend reforms to sectors which have been left untouched? I am not sure it makes sense to wait for people to demand reforms. Any reforms atleast initially are painful and the entrenched class will oppose them because it threatons the status quo. Remember the Bombay club and how it ranted against reforms? Hence, I would argue that reforms would have to be imposed from the top even against initial resistance. That is the only way I can see reforms coming in say the agriculture sector. To expect farmers to demand them is a bit too much. Yes, as the benefits begin to flow to them, then only a powerful pro-reform constituency will be built.

In my humble opinion, it is important to recognise how limited economic reforms have transformed India. Too many in the middle class seem to think that their newly aquired riches have fallen from the heavons or are solely the result of their own abilities. Pray, then why nothing happened for 40 years? (I am not suggesting you are one of them)

Third, I completely agree that we are not out of the woods yet. But please look at it this way, India and China constitute almost half of the world population, and most of the poor. Reforms represent a chance for the greatest movement in history, a chance for 2.3 billion people to pass from a life of abject poverty to a life where at least human dignity can be ensured. It is not my case that everyone in India will enjoy Western style living standards, not for another 100 years maybe. But is there no middle ground between surviving on dollar a day and western style consumption pattern? Is there no middle ground between poverty and economic superstardom? I would be happy if we are able to find that middle ground, Mishra seems to argue that since we are not likely to reach superstardom how does it matter if make some progress?

A most dangerous and intellectually dishonest argument!

Falstaff said...

seven times six: So basically, anytime someone questions your version of India's economic history he automatically becomes a "communist killer and poverty perpetuator" and is no longer worth listening to. Convenient. I'm sure Senator McCarthy would have agreed with you.

confused: my point is this - there's nothing in Mishra's argument per se that advocates rolling back reforms. His stated case you agree with. You can choose to read into his arguments a case for the roll-back of reforms, but it's in no way implied by the Op-Ed piece (which is the point I was trying to make in the post).

Perhaps Mishra does want the reforms rolled back. If so, I disagree with him - and I've said so fairly clearly in my post. But I'm reluctant to ascribe an anti-reform agenda to him without his having stated support for it. That's precisely the kind of "if you're not for us you're against us" thinking that I'm most opposed to. If we go by that logic then anyone who points to issues with the reforms is "trying to undermine the reforms". That's not a viable basis for healthy debate.

Let Mishra state whether he thinks reforms are a good thing or bad thing. Let him tell us, if he is against reforms, what he would rather have India do. If he ends up saying things that I disagree with, I'll be the first to call him on them. But I'm not insecure or paranoid enough to start calling him names the minute he says something I don't agree with, as seventimessix does above. And I don't see any reason why we shouldn't pay careful attention to his arguments and see what he might be right about even while he's wrong about other stuff.

For the record, I agree with most of what you say in your comments - and said as much in the post. But notice that even you're still arguing against what "Mishra SEEMS to be arguing". How much of this is what we're reading into his text? I, for one, refuse to condemn him until I've actually heard what he has to say.

confused said...

Falstaff,

And he will never say it clearly! That is my grouse with him. Anyway, my case is built not just on one op-ed but reading Mishra's other pieces too.

http://www.guardian.co.uk/commentisfree/story/0,,1794500,00.html

He makes the case how Nehruvian socialism was good, then makes the case how reforms have not benefited a majority without telling us how he wants to benefit them. I am just putting two and two together. :)

But yes, Our basic disagreement is about Mishra's intentions. I am not being as chairtable as you are. We can live with that. :)

confused said...

And yes, my final comment on this topic.

Its not about rolling back reforms, its about future reforms, for example disinvestments.

Falstaff said...

confused: Fair enough. Though notice that my post was just a reaction to his Op-Ed piece, not to everything he's ever written.

Notice also that there's not necessarily a contradiction between saying that Nehruvian socialism was good and that reforms must continue. That was then, this is now. India in 1950 is very different from India in 1990 - there's no reason to believe the same economic policies are appropriate.

You may be right in thinking that Mishra doesn't see the distinction. You're almost certainly right in thinking that many people reading him don't, but that's no reason to perpetuate the error by thinking the same way ourselves.

To be honest, I'm a little amused by people's reactions to this thing. You would think, reading some of the comments, that Pankaj Mishra was the new Finance Minister. More than anything else, I remain unconvinced that anything Mishra is saying is going to make any real difference to India's reforms, aside from providing entertainment to the desi blog community. Since everything he's saying is "known to everyone" it's hardly likely that it'll influence public policy. And remember, he's writing this primarily for Western audiences. Can you seriously imagine the West coming back to India and saying: "You made a mistake by going capitalist, you should revert to your socialistic principles". It's sad that the someone with a more balanced perspective didn't get the opportunity to write this Op-Ed piece. But it's a far cry from that to undermining reforms.

dazedandconfused said...

Agree whole heartedly with what you wrote falstaff. The whole piece written by Mishra is a little disappointing, and seems half cooked. Almost seems like a bit outsourced to an extent, does that happen in this profession?

Think that's leading to various extensions depending on whether people prefer to give him the benefit of the doubt or not.

seven_times_six said...

Falstaff, you did not get the purport of my confessedly rantish comment. I'm not angry with him because of the piece. I'm angry with him for his "communist-killer and poverty perpetuator" intentions. You're confusing cause and effect with respect to my comment.

You'd be indeed be right to conclude that I'm a insecure, stupid, intolerant McCarthyite if I draw my conclusions FROM the article. But I do not, and never claimed I did.

ASSUMING he does indeed have communist sympathies and intentions, and that is indeed also the purport of confused comment, I ask this: would you agree with my comment?

Grand Panjandrum said...

"...Chandrababu Naidu, the technocratic chief minister of one of India's poorest states..."

Andhra Pradesh had the fourth highest GDP amongst states in India in 2004, and was tenth in terms of per capita income. Neither of those statistics comes anywhere close to supporting the label 'one of India's poorest states'. Someone who claims to write authoritatively on economic policy in India and can still make a factual error as grave as that deserves to have his credibility questioned, not just his agenda or politics.

seven_times_six said...

as grave as that deserves to have his credibility questioned, not just his agenda or politics.

precisely panjandrum, if not from a single article perhaps, most definitely if he is doing this for the past decade. Not to do so would be naive, not openminded and objective.

If even intelligent moderates like Falstaff remain lenient, perhaps stemming from naivette and/or a desire to be fair, then what hope do we have to stop the socialist shenanigans of these people and also by extension the UPA administration?

Falstaff said...

d&c: Thanks.

seventimessix: Ah. See my post was based almost entirely on his Op-Ed piece, not on a detailed analysis of his overall character / sympathies.

As I imply in the post and explicitly state in the comments - if it's Mishra's case that we should turn back the reforms and revert to pre-1990 economic policy then I'm certainly against him. And will oppose him if / when he says so. I'm just opposed to attacking a piece where he doesn't say anything of the sort by assuming that that must be his agenda. I think the key difference is that you seem to believe that in order to stop the "socialist shenanigans" of these people we need to stop the people themselves. I'm saying - when they actually come out and make a socialist argument then we'll oppose them. I'm not opposed to Mishra at all, I'm opposed to arguments for the turning back / stopping of reforms, whomever they come from. And just because he's a communist sympathiser is no reason to assume he doesn't have anything interesting to say.

Oh, and on the UPA government slowing down reforms. I agree that that's troublesome. You suggest that that's because the ruling party has communist leanings. Perhaps. Mishra would argue that that's because the communist approach gets them votes - the reforms don't deliver a tangible enough benefit to the masses for politicians to be able to leverage them into votes, so they have no incentives to put effort into reforms. I think there's a good chance he might have a point. I'm a little sceptical about politicians having ideologies.

That doesn't mean we need to turn back reforms. It simply means that we need to find a way to make the benefits from reforms more visible to the masses. That's not just about achieving equity. It's about creating the political momentum to speed up reforms.

grand panjandrum: Fine, question his credibility if you like. I've never claimed that he gets everything in his article right, I explicitly say that he says a lot of stupid things.

My point is that an argument should stand or fall on its own merit, not on the credibility of the person making it. Mishra's point in presenting that fact is that despite Naidu's supposedly outstanding performance as a reformer, he didn't get re-elected to power, suggesting that whether or not the reforms are benefiting the common people, they're certainly not voting based on them. You're basically saying because he claims AP is one of the poorest states in India, which it's not, therefore this argument can't be true either. That's not a refutation - it's just dodging his claim.

YOu could argue that irrespective of whether people voted based on that or not, Chandrababu's tenure as CM actually contributed to broad-based development in AP. That would be at least partial refutation of what Mishra is saying (which is essentially - if people didn't vote for it, it couldn't have benefited them). Just saying that AP is not one of the poorest states doesn't disprove his basic argument.

Oh, and I'm not sure what you mean by "not just his agenda and politics". The fact that he makes grave factual errors is reason to question his credibility, yes, but says nothing about his agenda or politics. Unless you're assuming that he's deliberately lying because you've already assumed that he's a communist sympathiser.

seven_times_six said...

See my post was based almost entirely on his Op-Ed piece, not on a detailed analysis of his overall character / sympathies.

At the very least there seemed to be a detached curiosity as to why people were so pissed off. Hopefully, you now know.

With regards to reforms, you were clearly quite pro-reform from your post; unlike confused, I never tried to "convince" you of it, because there was no need to.

I only had issues with your taking of what people like Mishra say at face value: I reiterate, this is naivette and not objectivity.

Here are some related and instructive incidents:

About a year back, Ravikiran brought the exact same points as your post vis-a-vis an article by Dilip: clicky.
Only in it, he called out on Dilip's mischief; there was even a discussion in some other blog, which I'll try to dig up, in which people struggled to corner a splendidly dodging and equivocating Dilip into admitting that he supports the thesis that it is a lack of extending reforms to the poor that is not extending the "shining" to them as well.

A splendid post by Nitin on this, again a year back: clicky.

Falstaff said...

seventimessix: Four reasons why Pankaj Mishra is not Dilip:

1) Mishra is not offering anecdotal evidence based on his personal railway trips. He's citing perfectly respectable empirical studies. Sure, he's cherry-picking the evidence to make his case, but this is more than his own personal musing

2) The point of Dilip's article is explicitly to question the reforms and claim that they're not working. The point of Mishra's article (or at least its stated purpose) is that Western media has been too quick to celebrate India's rise, when the reality, as we all know, is nowhere near that rosy and there's a long way still to go.

3) Mishra's article is targeted at the average NYTimes reader. In your first comment you say that his piece is 'zero information'. But however obvious his points may be to you or me I seriously doubt they're obvious to the average New Yorker. I doubt even more that the average NY Times reader is going to come away from that article thinking "Oh, India should turn back its reforms and go socialist again." So to Ravikiran's argument - it's extremely unlikely that anyone reading Mishra's article is going to come away with interpretation 1.

4) Mishra has an argument to make. He's saying that unless reforms reach the masses, civil unrest will rise and political momentum will go against pro-reform politicians. He's also suggesting that we simply don't have enough resources to make the dream of Western style prosperity come true for a population the size of India's, so that we need to start thinking seriously about what our aspirations from the reforms are. He's not simply questioning whether reforms have worked so far, he's asking where we think we're going to get once they've worked, and whether that's credible or not. Both of those are, in my opinion, arguments well worth thinking about. Dilip, in the article you point to, says nothing remotely as intelligent - he's just saying there are too many poor people and he doesn't like it.

I agree entirely with what Ravikiran and Nitin are saying in response to Dilip's post. I'm simply questioning your assertion that that argument is related and instructive to this one. Dilip and Pankaj Mishra are not the same person. They do not share a point of view.

You say I'm being naive (it's naivete with a single t btw) to take Mishra at face value. I say that you're being paranoid and it's unfair to condemn someone by reading into their words something they haven't actually said. The only way reasonable way to resolve that, in my opinion, is to poll a random set of NY Times readers who read the Op-Ed piece and ask which interpretation they took away from that article. Since we're unlikely to be able to do that any time soon, let's just agree to disagree, shall we?

seven_times_six said...

1. Anecdotes are extreme cherry pickings of evidences.

2. Dilip never explicitly questioned the reforms in his article.

3. A variant of Mishra's NY times articles was first published in the Hindu.

4. Pankaj Mishra makes no such argument: please reread his article. You're drawing it as an inference. Which makes surprising your vitriol against the equally valid inference that he is communist-pinko scum who wishes to cast doubts on reforms (Again I draw this inference from his history of articles, not just this one)

Falstaff, I admire your spirited defence of Pankaj Mishra, he of the everestine intellect bestowing interesting problems for our perusal;

the mistake is all mine for I have not given any systematic evidence drawn from his assertions from his past articles, which you've professedly not read, nor have I properly pointed out the evidence even from the current article.

I'll try to do that in a post soon; meanwhile, as you say, we'll have to agree to disagree :)

[btw, I agree with your positions on the political implications of not broadening the stakes of the populace in the reform agenda. ]

Anirudh said...

Excellent.

Anirudh said...

By the way, do you spend half your day on your blog? (I've come to this conclusion after looking at the comments.)

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