The Wealth and Powerty of India

Gurcharan Das. (2002). India Unbound: From Independence to the Global Information Age. New Dehli, Penguin Books.

India Unbound is fascinating – a combination of autobiography and an essay series, where Gurcharan Das reflects on the various stages in his life and how what he learned changed his views on India, its politics and economic development. Das is a commentator and an essayist, and the book is colored by this: It repeat itself and belabors the same point from many angles. For a novice of Indian it is useful, best read with access to a computer so you can look up words and places like "haveli" and "octroi" as you go along. Das’ language is fluent and content-packed, with an elegance reminiscent of Landes’ The Wealth and Poverty of Nations (whom, incidentally, he criticises, rightly, for an overly simplistic explanation of India’s lack of progress).

Highly recommended. This essay borrows much from the book. Check out his columns here.

Some quotes:

On India after independence: There were two competing visions. Mahatma Gandhi had a vision of self-reliant villages, with a reinvigorated agriculture and craft production. He opposed modern urban industry because it dehumanized man. Jawaharlal Nehru had a modern scientific mind, and he was much impressed by the economic gains of the Soviet revolution; but he was also committed to democracy. He had a vision of democratic socialism with the state leading the process of industrialization. He spurned capitalism because it exploited and it created inequalities. Both Gandhi’s and Nehru’s ideas were flawed, however, and we have spent a long time chasing after them. Gandhi distrusted technology but not businessmen. Nehru distrusted businessmen but not technology. Instead of sorting out the contradictions, we mixed the two up. We have to deal with holy cows: smal companies are better than big ones (Gandhi); public enterprises are better than private ones (Nehru); local companies are better than foreign ones (both). They so mesmerized us that the succeeding generation, whose job was to jettison these foolish ideas, failed to do so and did us incalculable harm. (p.11) 

When ordinary human beings err, it is sad, but when leaders do, it haunts us for generations. (p. 51) 

If America is a melting pot, India is a mosaic. (p. 72)

The economists, it seems, turned out to be hopelessly optimistic about the ability of poor countries to transform their economies through investment in import-substituting manufactures and overly pessimistic about their ability to export. (p.75)

The more rules there are, the less people will do on their own, and the more effort they will spend in getting around the rules. […] The ordinary person will generally do the right thing, left to his or her own devices. The important thing is that people believe that only results will win them rewards.

In Hindu society the Brahmin (priest, teacher) is at the top of the four-caste hierarchy, followed by the Kshatriya (variously landholder, warrior, ruler). The Vaishya or bania (businessman) comes third, and the Shudra (laborer, artisan) is last. Below the four are casteless "untouchables" and tribals. The three upper castes constitute roughly 15 percent of India’s population, and have ruled th ecountry for three thousand years. About half of India is laboring or Shudra caste, divided in turn into hundreds of subcastes. [occupational or geographic]. More than 20 percent of the population are the casteless or "untouchables" and tribals for whose uplift Mahatman Gandhi worked all his life. The remaining 15% of India belongs to other religions: 11 percent Muslim; the rest Sikh, Christian, Parsee, etc. (p.140)

Modern India’s tragedy is not that we adopted the wrong economic model in the 1950s, but that we did not reverse direction after 1965. 

Businessmen are fine producers of goods and jobs, but they are cowards and do not speak out. 


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