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Business News/ Opinion / Déjà View | The beaten track
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Déjà View | The beaten track

We can pick and choose lessons from elsewhere, but then let us come up with an original path towards progress

Photo: Subhav Shukla/PTI Premium
Photo: Subhav Shukla/PTI

So, which country’s economic model should India pursue? Which advanced, or advancing, world economy’s model must we replicate in our country in order to create the 10 or 11 or 12 or 13 million jobs we need to create each year? Which globally recognized success story from the annals of macroeconomics must we study and analyse and implement and Make Indian so that we too achieve the standards of living, the incomes, the wealth, the capital, the infrastructure, the social mobility and, by extension, the standards and protocols of governance that so many of the rich countries in the West and East enjoy today?

As our prime minister has travelled around the world in the past 12 months or so, many of us have been tempted to ask certain, shall we say, questions of aspirations. Why can’t we be a land of free markets and opportunity and innovation and ingenuity like the US, we asked when Narendra Modi went to the US. Why can’t we adopt the US model?

Why can’t we become the world’s manufacturer and mass producer like China and create millions of jobs that way, we asked when Modi went to China. Why can’t we adopt the Chinese model?

When Lee Kuan Yew passed away we wondered…what if? What if India had done the things Singapore did? What if we had adopted the style of government that Lee Kuan Yew imposed so exuberantly and non-negotiably on the island city?

These are all interesting questions and well worth thinking about. They give us the tantalizing sense that fundamental economic and political transformation is one or two difficult decisions away. They give us the enormously optimistic idea that if only a prime minister here or a chief minister there would read the right history book or peruse the right white paper or even listen to the right podcast about Friedrich Hayek, the lives of a million of people may change in the course of months or years, or a term or two of government.

But I am afraid, dear reader, that these questions and aspirations are of somewhat limited utility. This is because in many cases we approach them without a sense of path dependency. And path dependency is both beautiful and exasperating.

Take the case of the US. So perhaps that is the model we aspire to. To become the fountainhead of free markets and liberty and military muscle and innovation. But let us keep in mind how the US got there. As The Gilder Lehrman Institute of American History explains in an essay on its website:

“In the pre-Civil War United States…One crop, slave-grown cotton provided over half of all US export earnings. By 1840, the South grew 60 per cent of the world’s cotton and provided some 70 per cent of the cotton consumed by the British textile industry. Thus slavery paid for a substantial share of the capital, iron, and manufactured goods that laid the basis for American economic growth. In addition, precisely because the South specialized in cotton production, the North developed a variety of businesses that provided services for the slave South, including textile factories, a meat processing industry, insurance companies, shippers, and cotton brokers."

So explaining American economic success without talking about slavery is entirely inadequate. But nobody wants to build an economy based on slavery today. So let us pass the Americans by and look for other models to emulate.

What about Europe? Well, colonialism was a little bit of a downer I think. Also all those wars of nationalism. But what about the black plague? If you’ve ever travelled through the European countryside and wondered why the villages of Idukki or Karaikudi or Hajipur look so terrible in comparison, spare a thought for the black plague. The Economist wrote in 2013: “The Black Death had horrific social effects. And the plague recurred sporadically until the 19th century. But by forcing the creation of monetized labour markets, as well as encouraging innovation and exploration, it spurred a weakened western Europe towards economic development. The West’s cultural superiority may not have been behind its eventual meteoric economic growth; disease did it."

Plague? Ugh. Don’t think that will clear the Lok Sabha. Any other models?

Well there is South Korea. Which is one of the world’s great success stories. But it too suffered decades of oppressive rule including an unbroken 30-year period from 1963 to 1993 when every single South Korean president was an ex-soldier. And we don’t have to travel too far from home to see the problem with having soldiers run a country.

Then there is the Singapore story under Lee Kuan Yew that many people are fond of. Somewhat fewer people talk of the success Hong Kong achieved without any strongmen. So which model? Hong Kong? Or Singapore? But then Amitabh Bachchan has more Twitter followers than the population of both those places combined.

So confusing.

You know what? Maybe we should come up with our own economic model. One that takes into account our own paths and the dependencies that come with them. We can pick and choose lessons from elsewhere, but then let us come up with something original.

Every week, Déjà View scours historical research and archives to make sense of current news and affairs.

Comment at views@livemint.com. To read Sidin Vadukut’s previous columns, go to www.livemint.com/dejaview

Follow Mint Opinion on Twitter at https://twitter.com/Mint_Opinion

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Published: 22 May 2015, 04:35 PM IST
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