The prime minister, in his annual sermon to the Confederation of Indian Industry, handed out ten commandments to industrialists. Industrialists are polite even when they are not obsequious, so they will not rebut him. But he should be answered.

The state makes money without having to earn it; it takes money away from people by force. It is difficult for anyone to live on unearned income unless he can reassure himself that he is doing some good unrelated to his take. Monarchs used to harbour illusions that the kingdom was bestowed on them by heaven. Conquerors and occupiers by force believe that they have saved their territories from worse rulers. Pervez Musharraf illustrates this illusion well. Elected rulers forget how accidental the results of most elections are. They like to believe that they are specially beloved of, and morally obliged to promote the interests of, the people who elected them; in a competitive system they also want to shower favours on people at others’ cost who they hope would elect them next time. The combination of power and illusion has led rulers unduly and unnecessarily to interfere in the lives of people, most often with good intentions. In his 40-year career, the prime minister has risen from the ranks to the top of the men and women who rule India. On the way, he picked up the ruler’s disease. The prime minister preached: “The time has come for the better-off sections of our society — not just in organized industry but in all walks of life — to understand the need to make our growth process more inclusive; to eschew conspicuous consumption; to save more and waste less; to care for those who are less privileged and less well off; to be role models of probity, moderation and charity.”

As others fall in love with beautiful women, the prime minister falls in love with beautiful phrases. For some years his favourite phrase was “development with a human face”; then he changed over to “inclusive growth”. These are only the latest euphemisms for income redistribution. Politicians across the world love redistribution. It serves their interests, for the poor are more numerous and have more votes than the rich.

Let us assume that redistribution is good. What behavioural rule does that belief enjoin? If being rich is reprehensible, then everyone should stay poor. If all believe and practise this, a society will remain poor. But that would not suit the prime minister, for he thinks poverty is a curse. Such a belief would give rise to the behavioural rule that everyone should receive the same income (adjusted for age, family size and personal needs) regardless of merit. In other words, the prime minister should be a communist: he should believe in the rule, “From each according to ability, to each according to need.” But that also does not suit him. After being witness to the self-destruction of the Soviet Union, one has to be an extreme idealist, not to say unrealist, to believe in compulsory equality.

And then, having once been a brilliant economist, the prime minister remembers the importance of incentives: he must believe that the lure of riches drives people to greater enterprise and effort. So he has come to the Gandhian view that the rich should work their asses off to get richer, but must not flaunt their riches, and should give away much of it to the poor. Would that be better than if they saved and invested in new productive facilities? Manmohan Singh has read Keynes closely, but he has got him wrong. Victorian businessmen lived modestly, not so much because they believed in modest living, but because the profits of reinvesting their savings were too tempting. “The new rich of the 19th century…preferred the power which investment gave them to the pleasures of immediate consumption.”

Are the Indian rich of today any different? Do they indulge in conspicuous consumption? The prime minister held his economic policies responsible for the fact that the savings ratio had risen from 32 to 35 per cent. That is an awful lot of savings, whether in historical or in internationally comparative terms; and those savings are mostly of those whom the prime minister would consider rich. They save so much for the same reason as their Victorian counterparts — that they face irresistible opportunities of profit.

This is not to deny the signs of conspicuous consumption at which the prime minister raised his eyebrow — clogged airports, new holiday destinations, the real estate boom. But he mistakes changing patterns of consumption for conspicuous consumption. Earlier, people used to take a train to a holiday destination; the trains were as packed then as planes now. Now that the monopoly of Indian Airlines is broken, air fares have plummeted, and airlines have clogged airports — because the government has under-invested in airports. People are going abroad on holidays now because of relaxation of exchange control. If they went earlier to Kerala, they go now to Malaysia — because Malaysia is cheaper. Since India’s population is growing so fast, houses are bound to be constructed. Once they would have been extra floors on urban houses; now they are high-rise housing estates because the technology involved has been imported. The prime minister sees conspicuous consumption because he disapproves of what he sees. When I think of conspicuous consumption, I think of whoring, drinking, fast cars. I see little of it in India.

And most of those consumers he frowns on are yuppies — the new working class, not the old moneybags. For the boom has created a labour shortage for the first time in India’s history — not everywhere, but fairly widespread. For the first time again, kids in their twenties earn more than wise old men like the prime minister.

Still, if the prime minister is worried that the poor will riot in a fit of jealousy and start killing the rich, his fear must be taken seriously. After all, he is in a position of power where he comes to know all sorts of things that we would not. I do see a rise in unrest and violence in the country. But I do not see how they are related to the rich and the poor. If Akalis attack Sacha Saudagars, if the government of West Bengal kills people in Nandigram, if the Bajrang Dal hounds Muslims, that is not class conflict. If there is any pattern in these events at all, it is the cowardice of Indian governments against collective violence.

Finally, let me come to the prime minister’s admonition to industry to become socially responsible. It should certainly try its hand at it, but only on the condition that the government gets out of the way. The government spends enormous amounts on health, education, environment, employment and so on. These are traditional areas in which it has spent an enormous amount since independence; and it has little to show for it. It should hand over the money it spends on these programmes to the private sector under conditional subsidy or incentive programmes; it will see the difference in a short time. But if it does so, what will the bureaucrats and politicians fatten themselves on?