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Myths about Nehru?

Not socialistic enough?

Politicians are a public nuisance. I find them very boring, and have not read anything much about them. But, I do not think that all evils flow from them to the masses. It is often the other way round. If the politicians are bad, people are worse. The bad guys could not have done it alone. The public policy is not too bad, not bad to the point that it wrecks the society only because  of the politicians and other policy makers. The politicians are more informed than the people. I think they are useful, as a safety valve. If the masses had their way, the policies would have been far worse. Now, even the people in the corner saloon want to believe that this is not a democracy, and that in a real democracy, manna will fall from the heaven. I think if this were a perfect democracy, it would have been hell.

When Ramachandra Guha says in a worshipful article that Nehru did not impose a centralized government on Indians, I will have to say that I tend to agree:

Myth: Nehru imposed a centralised, “Stalinist” model of economic development on India, thus setting us back by decades.

This is a myth promoted by those who favour quicker and greater liberalisation of the economy. In truth, there was a widespread consensus on the import-substituting model of economic development followed by India after independence. Not just Russia, but Japan and Germany were held up as examples in this regard. For one thing, the experience of colonisation had made Indians wary of the excessive and sometimes pernicious influence of foreign capital. For another, Indian industry itself demanded protection as well as state support and subsidy. Indeed, the Bombay Plan of 1944, signed by all the major capitalists of the time, called for active state intervention in sectors such as power, water, transport, mines, and the like — pleading that since the capitalists did not have the resources to develop these sectors, the state was duty-bound to do so. This is not an argument about the respective merits of free trade versus closed trade and capital regimes. It is an argument about why we chose the path of industrialisation that we did. And the answer is this — because industrialists, scientists, economists and politicians, of all stripes and ideologies, by-and-large concurred with Nehru. Or rather, Nehru concurred with them.

I am one of those people who favor quicker and greater liberalization of the economy. But, he is probably right. Was there a widespread consensus among experts that free trade is bad? Perhaps there was a consensus among scientists, industrialists, and politicians and Indian economists (!) of all stripes and ideologies that we should choose the path of industrialization(!). I do not know.

But, internationally, there was always a near-unanimous consensus among economists on almost every major, fundamental issue, including that free trade is beneficial. What scientists, industrialists and politicians (Or even Indian economists) think about free trade is irrelevant to me. The notion that economists disagree vehemently on the fundamentals is largely a myth propagated by the media. What journalists imagine to be a contrarian view is often a consensus among the economists. From Fortune’s “Concise Encyclopaedia Of Economics”:

Most of the disagreement among economists concerns “macroeconomics,'” which deals with nationwide or worldwide phenomena such as inflation, unemployment, and economic growth. Adherents of the various “schools” disagree a lot. Some of their disagreements reflect different judgments about the relative importance of, say, inflation versus unemployment. Others stem from basic disagreement on the ability of government policy to affect the total economy in predictable ways. 

Macroeconomics. however, is only a small part of the total science of economics. The vast majority of economic questions, and pubic policy issues fall in the realm of what is called microeconomics. And the vast majority of economists agree on the underlying economics of most micro issues, including rent controls, minimum wages, and the need to reduce pollution. Some may disagree on the policy implications of the analysis, but remarkably few disagree on the analysis itself.

That economists agree on most micro issues became clear in the late seventies when the American Economic Review, the world’s largest-circulation economics journal, published an opinion poll of 211 economists. The poll found that 98 percent agreed with the statement “A ceding on rents reduces the quantity and quality of housing available.” Similarly, 90 percent of economists agreed that “a minimum wage increases unemployment among young and unskilled workers,” And 97 percent agreed with the statement “Tariffs and Import quotas reduce general economic welfare.” 

So why do people think economists disagree about everything? One reason Is that the media present all economic issues as if they are inherently controversial. The issues themselves are controversial, but the economics of the issues more often are not, A journalist writing a piece on free trade versus protectionism, for example, would be hard put to find an economist who will defend protectionism (economists know that free trade virtually always improves a nation’s economic well-being) But many journalists feel compelled to get “‘the other side” and present a “balanced view.” So they go to economists who work for protectionist interest groups like the National Association of Manufacturers or the AFL-CIO to get an opinion against free trade. Or they turn to a business person or labor leader whose industry faces tough competition from imports. The result is that readers and viewers get the false impression that economists are divided on free trade.

Post Script: An interesting take on Nehru is that of Sasthi Brata:

“Remember, the person who actually wrote the best English, the Indian who wrote the best English, who do you think that is? I think it was Jawaharlal Nehru. If you read his Discovery of India you will find, it’s a beautiful, beautiful prose. And that was long, long before Nirad Chaudhuri ever was even born. Anyway, Nirad Chaudhuri writes a kind of pedantic prose. I am not downing it. I also have the audacity to say that in terms of English prose my prose is not too bad. It’s rather pompous to say that. I would say that the Indian who wrote the best English prose was Jawaharlal Nehru. It’s beautiful, it’s absolutely lucid prose. I admire English style, I really admire English style and he’s got it. This man should have been a writer. He bungled everything that he did in politics and was an absolute nuisance elsewhere. But as a writer he was brilliant. Not just brilliant, he was great.”

I liked Sasthi Brata’s autobiography, which was published when he was only 29, in the 1967. It is good English. Very good English. I cannot think of a single Indian in his 20s whose English language writing skills are as good.

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