The Telegraph
Tuesday , July 1 , 2014
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- Some reflections on the language of the new economics

For months and years, we have faced a barrage of articles, statements, TV chats, interviews, and so on, processing for popular consumption the dominant economic wisdom of the age. In India, such exercises have mounted since Narendra Modi’s victory, indeed the prospect of it. This is not to target Mr Modi: we do not yet know how his policies will shape up, how his two avatars — the messiah of growth and the man of the masses — will adapt to each other. My concern is with the way a certain economic model, advanced by its powerful clientele, has fired the Indian middle class and now, it seems, penetrated deeper into society.

I am not an economist. I write as a citizen at the receiving end of such policies. But let me draw briefly on my own discipline, which concerns language. For the rhetoric of the new economics revolves around catchwords like ‘growth’, ‘reform’ and ‘liberalization’, in a verbal sleight-of-hand.

Is there anyone who does not desire the nation’s growth? But the word has been hijacked by a particular model of wealth-creation based on aggressively free capitalism. If you contest such a model, to the exclusion of human indices and welfare measures, you are branded an opponent of reform. For ‘reform’ is an exalted term, sanctified from an earlier age when it meant eradicating social and — could it be? — economic differences. ‘Liberal’, too, has meant different, often opposite things over time, but it carries a feel-good air of approval.

It is for economists to debate the hard-core doctrine behind the words. But in the lay world of politics, the media and middle-class chatter, the doctrine is being sold by the emotive force of the words themselves, as one might sell perfume or chocolates. The idea has become a commodity, a product of the consumerism it advocates. In another perspective, it has become an article of faith no less than the opposite doctrine of communism. That too professed a scientific basis.

We are told that India voted in the recent elections with economic motives. Our jobless small-town youth agreed with our leading entrepreneurs on a government that would ensure their well-being through ‘growth’. There would be more wealth, and everyone would have a morsel of the cake.

The catch lies in that ‘and’. It involves the logical fallacy of the undistributed middle. Is the ‘growth’ implied in the two halves of the sentence one and the same? The humble youth who voted for ‘growth’ thinks that if there is more wealth around, some of it will reach him. He would be shocked to find himself working for lower wages on more straitened terms than before; to see health, education and transport services scaled down or priced up; and perhaps, if he belongs to the poorest stratum, to find his lot actually worsen, at least in relation to the rest. Wide disillusionment of this nature would be a national disaster. The resultant discontent and instability would not be good for any growth.

Mr Modi is a sagacious man: he may not let this happen. He is moreover said to be an efficient administrator. If he retains half the current welfare measures but makes them work, the poorest Indian would be materially benefited. But he is under siege to the shrill rhetoric of growth governing the national discourse at the highest levels, with choric support from the articulate classes.

This is not to say we should retain each and every subsidy, or lavish state bounty on the affluent classes. I am simply noting the contradiction between the common man’s expectation and that of the focused, influential partisans of ‘growth’. It is incorrect to say the whole nation has been fired by a single vision: merely by a common rhetoric, interpreted in different quarters in radically different ways.

But am I not challenging current global wisdom? Let us take the broadly parallel case of Britain, which has swung from welfare-statehood to free-ranging capitalism in a relatively short span. After a long wait, it is registering some economic uplift and (as in America) a rise in employment. But people in full employment constitute a growing percentage of the poor. Tens of thousands of British families rely on food banks: their number is rising incrementally. Three thousand persons died of hypothermia (in plain language, cold) in the 2012-13 winter. Young people have been officially warned to expect a lower standard of living than their parents. There is a stipulated ‘living wage’, but it is not enforced by law. Even hospitals and prisons are contracted to private agencies. The pay of hospital administrators has risen four times as fast as the nurses’, and British firefighters recently went on a 24-hour strike.

There are many reports of questionable dealings in high places, depriving the exchequer or patently impairing public interest: they may not constitute corruption as there is no law against them. Last month, the governor of the Bank of England — surely no rabid leftist — made a remarkable plea to reverse the growing inequality in Britain and the United States, calling on the nation’s financiers to look beyond immediate monetary gain as their sole end.

I cite this instance not to gloat but to warn. The British State is still vastly more ordered than ours, even its truncated welfare services beyond our dreams. Whatever the ethics of its high finance, it is free of ground-level corruption in daily life. Given this contrast, one shudders to think of the consequences if a comparable economic regime is unleashed in this country.

I would not be misunderstood. Like many others, I welcomed the opening up of the economy in the 1990s, dispelling the malign stagnation of the licence-permit raj. In Bengal, we also suffered from ideologically glossed inertia, with meagre advancement under party patronage. The benefits of the new order are too real to deny or to forgo: it has brought a measure of affluence and security to millions of Indians. But it has left our poorest citizens virtually untouched, and offered others only a narrow conditional benefit, stifling the very aspirations it induced. It has recoiled on some of its marginal beneficiaries, like the victims of fraudulent finance companies and cash-crop small-holders driven to suicide. It has hardly enhanced the status and dignity of the common Indian, and the new wealth has spawned appalling corruption.

The apologists for ‘growth’ argue they did not have free scope, that the harm from a moderate exercise would magically turn to good if carried to extreme. But if someone fails our trust over a thousand rupees, we would not trust him with ten thousand without some evidence of a change of heart or at least of strategy. The experience of other countries suggests that without some course correction, a blind charge down the same track might trample too many people underfoot, even some who may appear to be riding high.

Above all, it may deprive us of the very features of the West that induce us to follow their path: their relatively ordered society, their varying but often appreciable level of social services, the dignity and respite from petty corruption they seem to offer the common citizen. Such a condition was not created by their current dispensation but by earlier, often very different means. Today’s rulers are drawing on this legacy, sometimes in ways that threaten its survival.

Implanted on our unequal, violent and still feudal society, an unchecked neo-liberal economy can work havoc, laying aside even the pretence (and sometimes the actual benefit) of the old populist rhetoric. In the process, the most pernicious elements of the traditional order are acquiring a new predatory zeal in the power play of caste, gender and communal tension, worked through increasingly naked greed, violence and thuggery (or at least the open defence of such) higher and higher up the power ladder. Our economic dream is taking the path it did in the American West in the 19th century.

A nation’s social and economic policies cannot be the object of an academic exercise. In a democracy, they are finally shaped by the dreams of the common citizen. The rich and powerful, in turn, try to shape those dreams by self-serving strategies. It took us half a century to emerge from one such dream. Let us look around with wide-awake eyes before we lapse into another.